The U.S. Supreme Court Monday unanimously ruled for California raisin producers,
who said the government transferred their assets without just compensation.
The high court ruling allows the producers to pursue their claim.
The Agricultural Marketing Agreement Act of 1937, AMAA, was designed to stabilize prices for agricultural commodities but it regulates only "handlers" -- "processors, associations of producers and others engaged in the handling" -- of agricultural commodities.
Any handler who violates the U.S. agriculture secretary's marketing orders may be subject to civil and criminal penalties.
The California Raisin Marketing Order established a Raisin Administrative Committee, or RAC, which recommends setting up "annual reserve pools of raisins that are not to be sold on the open domestic market, and which recommends what portion of a particular year's production should be included in the pool."
The order also requires handlers to pay assessments to help cover RAC's administrative costs.
California raisin growers started a business that processed more than 3 million pounds of raisins from their farm and 60 other farms during two crop years. When they refused to surrender portions of raisins to the reserve, the U.S. Department of Agriculture began administrative proceedings, alleging the growers were actually handlers required to retain raisins in reserve and pay assessments.
One grower was slapped with a $700,000 fine; others also were fined.
The farmers responded by saying they were producers, not handlers, and were not subject to the order. They also cited the Fifth Amendment's prohibition against taking property without just compensation.
An administrative law judge ruled the farmers were handlers who had violated the AMAA and the marketing order.
Eventually a federal appeals court ruled that the farmers were handlers, and said it had no jurisdiction on the takings claim because the claim should have been filed in the Court of Federal Claims.
In the Supreme Court, a unanimous opinion by Justice Clarence Thomas said the appeals court had jurisdiction to hear the constitutional claim. The high court reversed the appeals court and sent the case back down for a new hearing based on Thomas' opinion.
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